It New Years Eve! Time to consider making dealing with your corporate debts a new years resolution.



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PARIS — MHS Electronics, a privately held electronic component and systems maker near Nantes, France, announced the opening of insolvency proceedings at the Commercial Court of Nantes on Dec. 5, 2008.

MHS Electronics said the Commercial Court of Nantes decided on Dec. 10, 2008, to put the company into receivership for a six-month observation period so as to consider a recovery plan. The plan will be defined with the help of an official receiver appointed by the Commercial Court so as to help the company overcome this difficult period.

The year 2008 was tough for MHS. Due to a 20-percent decline of activity, the company took some measures to reduce costs in July. This plan consisted in the suspension or the cessation of some research programs and the implementation of a synergy and efficiency program with the other entities of the group.

Although those measures have borne fruits, they could not suffice. The uncertainty of the worldwide market, the lack of visibility for 2009 and a tight cash flow indeed encouraged MHS to open insolvency proceedings, the company indicated.

MHS Electronics, a subsidiary of the French MHS Industries holding company, is a silicon foundry provider of specialized analog and mixed-signal technologies.

In December 2005, French group XbyBus acquired Atmel Fabrication SAS on the production site of La Chantrerie, near Nantes, and created MHS SAS (Micro components High Security). To preserve its flexibility and break with Atmel’s business model based on large volumes, the company focused on groundbreaking technologies.

Since the acquisition of the Atmel Nantes Fabrication SAS, and of the Zarlink Analog Foundry activities in Swindon, UK, in March 2008, the company is composed of 370 employees, out of which 250 in Nantes.


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FOR people like Elizabeth Yates the credit crunch has been more than just a numbers game.
Like 59 other individuals in Derbyshire she was forced to file for bankruptcy in November.
And she says that, despite fearing for her future credit rating, the soaring prices of gas, petrol and food had left her with no choice.
At one stage in the autumn, Miss Yates, on maternity leave from working as a pharmacy technician, said she was struggling to buy food for herself.
She gave birth to her son Owen in April.
%3Cbody%3E%3Cdiv%20id%3D%22adDiv%22%3E%3CA%20HREF%3D%22http%3A//ads.anm.co.uk/ADCLICK/CID%3D0000b139bb3f965200000000/AAMSZ%3D452x118/SITE%3DTHISISDERB/AREA%3DNEWS/SUBAREA%3DHOME/ARTICLE%3D546883/acc_random%3D2591203521/pageid%3D/RS%3D%22%20target%3D%22_new%22%3E%3CIMG%20SRC%3D%22http%3A//iad.anm.co.uk/house/1x1.gif%22%20ALT%3D%22Click%20here%21%22%20border%3D0%20style%3D%22margin-bottom%3A%200px%3B%22%3E%3C/A%3E%3C/div%3EThe 25-year-old said: "At one point it had become hard to afford food day-to-day.
"It was partly because of the debt and partly because of rising prices.
Miss Yates, 25, lives with her partner Craig Bausfield, 31, of Brunswick Street, Normanton.
She said she was lucky because Mr Bausfield had provided her with somewhere to live when she could not afford anywhere herself and had no assets.
Up until November 28, this year, when Miss Yates' bankruptcy was confirmed, she said she made several financial choices she regretted.
Overuse of credit cards had left her thousands of pounds in the red.
She said: "I kept asking for credit cards and loans and the banks and building societies kept giving them to me. I was young and silly.
"I thought I had found a solution with a debt management company which spaced out my loans so I could make the payments over a longer period.
"But the company I chose weren't very good. They charged me £35 a month and to do their work but they didn't sort out new contracts with the companies I owed money to for about a year.
"The companies weren't much help either. All they wanted was their money."
Miss Yates said the final straw came in the form of a gas bill which asked for more than twice the quarterly amount she had usually paid.
She said: "It was for £300 and the most I'd paid before was £120. At that stage my debt was around £13,000.
"I rang the National Debt Helpline and they advised me against filing bankruptcy because I was so young but they weren't suggesting anything I hadn't already tried."
The helpline operator said Miss Yates should ask for an Individual Voluntary Arrangement, or IVA.
This is a formal agreement between a debtor and their creditors to make reduced payments on outstanding debt over, typically, a five-year period.
But Miss Yates decided this would not deal with her immediate cash-flow problems and decided to pay the Insolvency Service the £500 needed to become bankrupt.
Figures show there has been a doubling of bankrupty cases in Derbyshire in the past three months.
The figures have been collated from bankruptcy notices issued by Derby and Chesterfield county courts, published in the Evening Telegraph from September 1 to November 30.
In total, 135 people filed for bankruptcy, as did 50 businesses, during that period.
And the situation is set to worsen next year, according to a survey of insolvency practitioners in Derbyshire.
R3 Midlands, the regional trade body for insolvency practitioners, carried out a survey of its 300 members, including those in Derbyshire, asking for their predictions.
It was the first time R3 Midlands (R3 stands for rescue, recovery and renewal) had carried out such a survey.
The results present grim reading, with members predicting that the rate of corporate bankruptcy will rise by 41%.
It also predicts that personal insolvency will grow by 22%.
This means that in November next year, 31 businesses in Derbyshire and 73 individuals could be filing for bankruptcy.
According to insolvency expert James Martin, chairman of R3 Midlands, it is a worrying situation.
Mr Martin, who lives in Repton, has more than 20 years experience working in corporate recovery.
Until recently he worked at Derby-based Cooper Parry but is now a partner at Birmingham-based Begbies Traynor.
Mr Martin said: "The increase in business insolvencies could be catastrophic for Derbyshire and, unfortunately, could mean we will start to approach the numbers we saw at the peak of the last recession in 1992.
"In comparison to that recession, this downturn is more sudden.
"This time you not only have economic confidence hit by the house price bubble bursting, but also liquidity problems at the banks.
"Liquidity, or cash available to lend, is what oils the economic machinery.
"For the last three or four years a number of businesses that perhaps were not performing well have been kept alive artificially by the easy availability of credit, which has now dried up."
According to Mr Martin, from his own day-to-day dealings, the two sectors that are particularly suffering are construction and haulage.
He said: "These sectors have been particularly affected by the credit crunch.
"We do need to keep a sense of proportion, however, because even with such a sharp increase in failures, the vast majority of businesses will come through this painful period.
"Those companies that have borrowed sensibly within their means will survive.
"I believe the small to medium sized businesses who have consistently remained in the black should still be here when things improve and be in a good position to grow."
On the issue of personal insolvency, Mr Martin said: "The availability of credit has tempted people to borrow money, but they have no idea how they are going to pay it back.
"It is very difficult to apportion blame. Is it their fault for borrowing it, or the banks for lending it to them in the first place?
"Traditionally the route into personal insolvency is not an overnight process and, unsurprisingly, people will put off dealing with financial problems until they have exhausted all other options.
"Because of their inability to pay back the money, some choose bankruptcy as a way of clearing their debts.
"This sounds drastic, but I believe that there isn't the stigma attached to bankruptcy that there once was. We've moved on from the days of the debtors' prison.
"That said, it does give you a black mark on your credit rating and makes it more difficult to borrow money in the future.
"Insolvency is more difficult for individuals to handle.
"Businesses unable to pay their debts can make changes that can improve profitability.
"For individuals, there's only a certain amount of hours they can work in one day in order to generate more money to pay their debts."
With Christmas shopping now in full swing, we have entered a phase when some people will be looking to spend more.
But according, to Mr Martin, this year we will be more conscious of what goes on our plastic.
He said: "We did some research recently which found that more people in the East Midlands would be watching what they spend.
"It's reassuring to me that some people will be using more common sense.
"But it's a tricky situation. The Government is encouraging us to spend by reducing VAT, yet none of us want to buy things that we cannot afford.
"But we cannot sit at home and buy nothing otherwise everything will grind to a halt. It is a question of being sensible."
According to Mr Martin, the most crucial thing that any business or individual can do if they see financial problems on the horizon is to seek help early.
He said: "It can be a very lonely existence facing these issues alone.
"The key is that the financial problems are identified as early as possible. It is like a medical condition - the earlier it is spotted the easier it is to treat. We're surgeons, not morticians.
"But I also don't want people to think that from this survey we are simply scaremongering.
"This is very much a reality check. There is no point denying the fact that tough challenges lie ahead.
"The credit freeze is going to take some time to thaw.
"While the business climate remains tough, it is advisable for businesses


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The predicted spike in channel business failures has already started, insolvency experts have warned.

According to channel advisory service ChannelMoney, the weekly rate of channel insolvencies has doubled to 15 this month, despite forecasts that the carnage would not begin until January.

Nitin Joshi, founder of ChannelMoney, pinned the blame on banks and credit insurers’ lack of support for smaller dealers.

“We have seen a discernible increase in channel firms going to the wall in December and we see that pattern continuing,” said Joshi.

“Banks are not lending new money to SMEs and credit insurers have retrenched cover to the channel.”

VARs to have recently entered administration include Comment Retail Services and Brett Technologies Services. Weston Connections and IT Team Solutions are among those to have been liquidated since November.

But Joshi praised distribution credit managers for taking a more supportive role.

Howard Russell, director of reseller Signature Networks, claimed that many smaller firms would voluntarily fold before Christmas.

“There are many companies that need an overdraft, but without knowing what business levels will be next year, are deciding not to risk it and are throwing in the towel,” he said.

Nick Tiltman, credit director at Computer2000, said the distributor had seen no increase in bad debts.

But he added: “Historically, there is a spike before Christmas as many directors that are struggling do not want to go through Christmas with it hanging over them.”


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New Year is almost here. How about making your new years resolution to deal with your corporate debts?


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Enjoy your Boxing Day!

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Merry Christmas 2008!

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Christmas eve is here at last. Enjoy your Christmas!

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Our Offices will be closed from Christmas Eve (24/12/08) until Monday 5th Jan 2008. If you wish to email in with your details someone will contact you in the new year.

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Insolvency specialist says it has seen a surge in approaches from struggling businesses

The UK faces an 'epidemic' of business failures next year, with companies in the retail, motor and property sectors most at risk, a leading insolvency specialist has warned.

As the economic downturn deepens Tenon Recovery said calls for assistance from companies in the retail, restaurant, motor industry, property and leisure industries in the last two months were nearly 200% higher than the same period last year.

“We believe the symptoms we are seeing now are a precursor to a potential epidemic of insolvencies in 2009,' said Carl Jackson, head of Tenon Recovery.'It is quite usual for some non-seasonal businesses to turn off the lights in the run up to Christmas as they know they will not be able to survive in the New Year but we have never seen such a broad spread of businesses fail so early.'

The primary characteristics of a troubled business include weak equity base, low profit, losses, weak management, substantial debtors, and a high fixed cost base, according to Tenon.

It has published a financial 'health check' to help struggling companies, including advice on management information, management control and systems and processes.



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The Joint Administrators of Entertainment UK Ltd (EUK), the wholesale distributor of entertainment products, are to scale down efforts to sell the business as a going concern, having been unable to find a buyer.

EUK will continue to operate with a reduced workforce of 375 employees, while the Administrators continue to realise value from the assets of the business. As a result, 700 employees have today been made redundant.

Dan Butters, Joint Administrator and reorganisation services partner at Deloitte, said: 'Regrettably, despite our continued efforts, we have been unable to identify a suitable buyer for the business. Whilst we will continue to consider offers for the sale of the business as a going concern, we will now focus on realising value from the company’s assets.

'Unfortunately, it has been necessary to make 700 redundancies at the company’s head office and distribution centres in Middlesex. We will retain a core team of 375 employees.'

The Administrators are working closely with Job Centre Plus to provide support and advice to employees who have been made redundant, and the Insolvency Service’s Redundancy Payments Service has put together a team to quickly approve claims for employee entitlements.

Butters added: 'We are extremely grateful to the staff and management for their support throughout this difficult time. We would also like to thank the Job Centre and Insolvency Service for their cooperation and help.'

The Joint Administrators confirmed that Bertrams Books, a fully owned subsidiary of EUK, and 2Entertain, a joint venture between EUK and BBC Worldwide, will continue to trade as usual.

Entertainment UK and Woolworths Plc were placed into administration on 27 November 2008. Dan Butters, Nick Dargan and Neville Kahn of Deloitte, the business advisory firm, were appointed as Joint Administrators.



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A chain of retail outlets that specialises in Christmas goods and seasonal gifts has become the latest victim of the sharp decline in the Irish retail sector.

2woSeasons, which operated three outlets in Naas, Sligo and Drogheda, has gone into provisional liquidation after building up significant debts and running out of cash.

George Maloney, an accountant with Baker Tilly Ryan Glennon, was appointed provisional liquidator to the overall holding company Two Seasons, following a petition to the High Court last week.

A full hearing on the appointment of the liquidator will take place in the coming days. The court granted the liquidator powers to continue to trade, and to carry on the business as necessary pending an overall assessment of the company.

The retail chain based much of its business around the Christmas and summer market. In recent weeks, the three stores were themed around Christmas and were selling various Christmas-themed products and gifts. The firm recently rolled out a 21.5 per cent price reduction in an effort to stimulate business.

According to its most recent accounts, Two Seasons owed creditors more than €1 million at the end of 2006 and recorded a loss of €250,000 during the year.

The company is majority owned by Patrick and Patricia McGuane, both with an address in Naas, Co Kildare. Jasmin Nelson, a British businesswoman, owns 40 per cent of the business.

According to company filings, Nelson took the stake in February 2006 after investing €120,000. The company is the latest in a series of high street retailers to experience pressure from declining consumer spending. Sasha, the women’s retail chain, sought bankruptcy protection from its creditors in recent weeks, while a number of other retailers are scaling back operations and restructuring.


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One in 10 of the contractors named in the OFT's cover pricing investigation has fallen victim to serious financial problems or ceased to trade.

Of the 112 contractors named in April's Statement of Objections (SO), a total of 10 are now in administration or liquidation, after York House Construction called in administrators last month (see list below).

The high proportion of struggling and failed businesses among the group of accused has sparked fears that high levels of fines from the OFT, expected to be announced in the early part of 2009, could send even more companies under.

The OFT has the power to fine a company up to 10% of its relevant turnover if it is found guily of fraudulent bidding practices.



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Distressed debt investors are looking at the financial services and healthcare sectors, but expect the better deals to start coming through towards the middle of 2009, a conference heard this week.
"We are seeing opportunities in markets that have been over-criticised, such as financial services," said Terry Hughes, a partner at Silver Point Capital, participating in a panel discussion at IIR's 5th annual Investing in Distressed Debt Conference on Wednesday.
Silver Point, a credit opportunities fund with some $9 billion under management, has recently invested in a factoring company which buys invoices from firms seeking to raise cash quickly.
Hughes also sees some interesting plays in the healthcare sector: "The key is finding sectors where the perception has been overdone."
Nathaniel Meyohas, vice president at private equity firm Sun European Partners, said he expected to see increased deal flow next year from any sector that relied on disposable income.
"But you need to find the right company - one that has a reason to exist. We are focusing on market leaders or strong brands."
Deal flow has increased sharply already, but he cautioned that the time was not yet right to take the plunge.
"In Europe we used to see 100 good opportunities a year. Now we are seeing 100 opportunities over two months - but they tend to be the least attractive assets," said Meyohas.
Private equity turnaround funds were warned yesterday by Northern Trust to exercise restraint as they trawl through the prospects when companies hit the buffers.
BETTER PICKINGS
As the most fragile companies tend to fail first, investors are inclined to wait for better pickings, with mid-2009 seen as the crunch time.
With only a dozen or so active distressed debt buyers in Europe, the rewards are expected to be high for those with the expertise to navigate European restructuring regimes.
Deal flow is expected to be particularly strong in the property, chemicals, auto and retail sectors, said Peter Marshall, managing director at restructuring advisory firm Houlihan Lokey Howard & Zukin.
As the distressed cycle is accelerating, one of the big issues is whether struggling companies will bypass restructuring and go straight to insolvency, said Christine Elliot, CEO at Institute for Turnaround, a professional body.
The use of so-called covenant-light debt terms in the last few years has meant restructuring advisory firms can have as little as 3-6 months to try and save a company from bankruptcy, rather than the more usual period of up to two years.
"So a greater number of companies which shouldn't fail will fail," said Marshall.
"There is also no clarity on exits because the M&A market is dead so investors may be reluctant to put their money in."
He cited the example of Germany's TMD Friction, a supplier of brake pads to the auto industry, which has recently been forced to file for insolvency for four German plants, due to strains on its liquidity and working capital.
"Auto suppliers are facing problems because EBITDA has fallen off a cliff and, in some cases, trade credit insurance is being withdrawn," Marshall said. "Where there is no new funding forthcoming, break up plays start to look sensible."
Marshall added that in the past the pain was mainly taken at the junior debt levels, but he is now seeing deal after deal where the senior levels were being hit.
"This means more companies will end up going down the insolvency route." (Editing by Simon Jessop)

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COMPANY directors are taking a bigger hit if their business collapses than ever before, according to Sheffield insolvency expert Andy Wood.
Mr Wood, regional chairman of the insolvency professionals' body, R3, and a partner in the Sheffield-based P&A Partnership, says far more directors have given personal guarantees for loans than was the case during the last downturn.

"There are many more personal guarantees out there this time which means that directors are taking far more of a personal knock if their business fails," says Mr Wood.

"This will have the inevitable consequence that many business people will be reluctant to start another business after this downturn."

Mr Wood is also warning of increased instances of fraud and legal claims against valuers and accountants.

"Downturns typically lead to increased instances of fraud, and this one is no exception," says Mr Wood.

"We are seeing some businesses issuing invoices for 'fresh air' so they can claim payment under invoice discounting contracts. Factoring companies are carrying out more stringent checks on invoices as this is becoming a significant issue.

"We expect professional indemnity claims to start being made against valuers and accountants because a lot of lenders' securities are now proving hard to establish.

"Accountants who have audited larger businesses may be at risk if they approved the accounts with an over-optimistic valuation when markets were falling or already in turmoil.

"Anyone signing off accounts now needs to double-check valuations and ensure they can be justified in the current market."

According to R3, banks and insolvency practitioners are becoming more creative than ever in order to avoid distressed sales of properties.

The organisation says that, with a growing number of property developments facing insolvency, banks are considering alternatives to sales, including putting tenants into newly built apartments where the owners have defaulted on their loans, and using property management services companies to manage the lettings.

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Woolworths administrator Deloitte has announced 450 redundancies in the company’s London head office and at its support operations in Castledon, Rochdale. No roles have been made redundant in the group’s high street stores, distribution centres or at its entertainment distributor EUK.

Job Centre staff will attend both sites to provide advice and support to employees who have been made redundant and the Insolvency Service has put together a team to approve their entitlements claims. Deloitte said it will keep Woolworths’ stores and distribution centres operational until after Christmas with a simplified core structure supporting them.

Deloitte said it is still working alongside Woolworths management to find a buyer and retains hopes of selling the retailer as a going concern to preserve as many jobs as possible. A number of interested parties are said to be in talks with the administrators.

The administrator also issued assurances that Woolworths’ Biggest Ever Sale, which launched today, will not adversely impact efforts to sell the business. Yesterday, Woolworths announced discounts of up to 50 per cent on all goods including 50 per cent off toys, 30 per cent off Christmas trees and decorations and 50 per cent off greeting cards. It is feared that offers at the retailer will hit high-street competitors in the run-up to Christmas.

Deloitte reorganisation services partner and joint administrator Neville Kahn said: "We have today launched Woolworths’ Biggest Ever Sale, which is complementary to and will not adversely impact upon our efforts to sell the business. We are extremely grateful to the staff and management for their continued support at this difficult time. We would also like to thank the Job Centre and Insolvency Service for their cooperation and help."



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Manchester-based ACG North Ltd, a division of Artisan Construction Group, has been placed into voluntary liquidation, it has been announced.

The proposed liquidation of ACG North does not impact upon any of the other businesses operating in the Artisan Construction Group or the group’s construction capacity, the company said.

Paul Curran, newly appointed managing director of ACG North said: “Substantial funds have been injected into ACG North Ltd in an attempt to trade it out of its problems, but having taken expert advice and to protect our creditors, we took the decision to put it into liquidation. This situation has not arisen because of the economic downturn, but because of a legacy of poor management decisions by personnel who have now left the company.”

ACG North was overseeing work on 96 flats in the regeneration of Liverpool’s Kings Dock.

Stockport-based liquidator Bennett Verby is overseeing the liquidation.


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Nearly 200 people have lost their jobs after an 80-year-old toy and stationery distributor collapsed into administration.


J A Magson appointed the insolvency firm Leonard Curtis as administrator, becoming the latest victim of the consumer recession. While Magson's customers include Co-op, Sainsbury's and Somerfield, it did not supply Woolworths, the retailer, which fell into administration last week. A large number of retailers and suppliers have hit the buffers this year, as sales orders have dried up during the recession.

Magson, based in York, made 170 staff redundant on Tuesday, but 30 employees will remain working in its head office to help the administrators. A Leonard Curtis spokeswoman said it had to make the sales staff redundant by conference call because they were scattered all over the country. Neil Bennett, a joint administrator at Leonard Curtis, said: "The current management team has done a remarkable job in turning round a business that was ailing two years ago and injecting modern business controls and good governance. Sadly, however, retail conditions just don't favour this scale of operation, so we are hopeful a major retail group will be willing to make the required investment to further transform and consolidate all the improvements already made."

A Magson spokesperson said: "Despite the trading downturn, there are still some very positive aspects to our business and our customer base and supply chain not least our pricing and delivery track record and it may be that a larger retail concern would find us very attractive. As yet, however, we have not secured any interest."

Pinnacle, one of the UK's largest independent distributers of CDs, DVDs and games, also called in the administrators yesterday. The company, a rival of Woolworth's EUK unit, supplies retailers such as HMV, Amazon and WH Smith. BDO Stoy Haward have been appointed.



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THE owners of a bakery chain based in Cynon Valley have confirmed the company has gone into liquidation.

Staff at the 25 of Ferrari’s remaining stores across the South Wales Valleys have been told to shut up shop and return keys.

Steve Davies, from the parent company ICD Wales Ltd, said the decision was taken last week after a meeting with financial advisers.

In October, Ferrari’s – based on the Bryngelli Industrial Estate at Hirwaun – closed seven stores in the south Wales region with the loss of 43 jobs.

Ferrari’s has had a High Street presence in Wales for decades.

ICD Wales Ltd took over Ferrari’s in June following a two-week closure when the factory which supplied the stores, Best Bakeries, went into administration.

The bakery was subsequently taken over in a management buy-out and resumed production.

In a statement, ICD Wales Ltd said “After a meeting, it was advised we liquidate the company.

“The staff were told to shut on Tuesday, November 25, and return their keys the following day.

“Everybody is upset.”

It is understood that around 150 people were still employed by the bakery chain before the announcement.

The company said a downturn in consumer confidence was to blame for the decision.



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The original firm went into liquidation in October, being replaced by a group of directors operating a team half the size.

The eight-strong unit is headed by directors Kevin Hughes, Michael Naish, Lisa Tapper, Simon Sketchley and Sheryle Daniels.



Sketchley was previously the General Manager at AJS Theatre Lighting & Staging Supplies in Ringwood.

Tapper said the firm was legally unable to comment on why its previous incarnation was unsuccessful.

Phoenixing is always a contenmtious process because it can leave creditors out of pocket. Last month Event reported PSL "phoenixed" resulting in some impassioned comments.


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THE company responsible for the much-lauded Westport 3D model has gone into liquidation. AMT3D – who had an office at Church Lane in Westport – went into liquidation on November 14, with the loss of three jobs.
However, the operational and maintenance elements of the business were merged with a Newport-based company to safeguard existing clients and ensure that current projects will be finished and maintained into the future. The Westport 3D model will continue to be hosted on Google Earth, and with no outstanding work remaining to be done, it can still be expanded if the need arises to do so, while the Town of Tomorrow competition will continue to operate as usual.
Managing Director of AMT3D, Mr Brendan Hafferty, told The Mayo News that he is disappointed by the closure of his company, but that several factors had come into play at once which brought about the liquidation.
“The knock-on effect of the construction industry slowing very considerably was a factor and we were receiving no support from the banks and our investors could see no opportunities in the short-term,” he said.
While the limited company has gone into liquidation, Brendan Hafferty is continuing to draw on his experience and network of contacts to work as a consultant in all aspects of 3D visualisation.
Mr Hafferty also rubbished stories circulating last week that the Westport 3D model was not what it was made out to be, and confirmed that customers of his company were informed of the difficulties and changes that would be taking place as far back as two months ago.
“There was a negative report that the Westport 3D model was not as good as we were making it out to be, but Westport is still the only town in Ireland on Google Earth, and there is no town in the UK modelled the same way. There are other international city models on Google Earth, but many of them are just grey block models whereas the Westport model is photo realistic and highly accurate. Daniela Brica, Google Earth’s Senior Associate and 3D Captain for Europe, Middle East and Africa, came to Westport in January and said that the Westport 3D model is among the most realistic photo-accurate town models in the world to be hosted on Google Earth. It was not AMT3D which stated this, and to say otherwise is wrong."


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FERRARI’S Bakery has gone into liquidation, the company has confirmed.

The South Wales business is the latest casualty of the economic downturn which has seen thousands of people lose their jobs.

Staff at the remaining 25 Ferrari’s stores have been told to close the doors on the business for the final time, with dozens now facing unemployment at Christmas.

The company had apparently been saved after the company when ICD Wales bought the Ferrari’s and Sweetmans outlets after previous owners Best Bakeries went into administration.

Steve Davies’ company, Nantgarw-based Springfield Soft Drinks, had been a supplier to Ferrari’s and bought up 32 Ferrari’s and Sweetmans stores when owner and main supplier, Best Bakeries, ceased to trade.

But it seems he was unable to save ailing Ferrari’s.



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While US shoppers search the stores for post-Thanksgiving bargains, small businesses that buy and sell excess stock are being offered even more extreme deals this winter, as leading retailers struggle to shrink their inventories.

Liquidation.com, a web-site that stages auctions of excess products, or those that have been returned, says it has had an increase of “about 800 per cent” in the number of auctions currently on its site compared to last year.

EDITOR’S CHOICE
US downturn - Nov-27The site features an eclectic range of bargains – from high-definition Samsung televisions (for $276 each), to an Yves Saint Laurent umbrella (for $6.25). Bill Angrick, chief executive officer of Liquidity Services, the site’s owner, says he has seen a flood of new business since September, when falling consumer demand took retailers by surprise.

“There’s an insatiable demand for bargain or discounted merchandise on the buying side, and there is a tremendous increase in volume coming out of the supply chain from retailers and manufacturers,” he says.

Leading stores have “made the decision that it is prudent to cut the volumes ahead of what looks like a once in 20-year decline in spending patterns”.

His company, which turns over about $350m a year (€272m, £227m), is just a small part of a returns and resales business valued in billions of dollars.

Liquidation.com’s recent auctions have included a lot of 49 women’s suits from the shelves of Macy’s and Bloomingdale’s department stores that sold for $750 – against the combined recommended retail price of more than $11,000. Mr Angrick says that most of the buyers on the site are small businesses, such as so-called mom and pop outlet stores and regional chains, while some of the inventory is acquired by Ebay “power sellers” who sell direct to online shoppers.

Joel Holtzman, chief executive of Excess Technologies, a smaller Atlanta-based liquidator, says his company is also facing a surge in offers, which include 324 women’s evening dresses reduced from $138,000 to $9,000.

“It’s gone from 70 per cent of my calls being from sellers, and 30 per cent from buyers, to perhaps 95 per cent from sellers and 5 per cent from buyers,” he says.

Large shipments of excess fashion inventory are the stock-in-trade of several national bargain retailers, including Ross Stores, Big Lots and TJX, owner of TJ Maxx.

The chains’ sales outperformed most of their full-price competitors in October, joining a select group that includes Wal-Mart, the US supermarket chain, and dollar stores.

Mr Angrick argues that, in spite of the slowdown, inventory still eventually sells even if it ends up exported to the developing world.

“There is a trading down at every rung on the ladder in this environment...that cascading effect means that, if you can bring [a] product to market that is below wholesale prices, you are very attractive [to consumers],” he says.

“It is human nature. You want to go out and put something in your bag and take it home...and people will just spend less for that item.”


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The insolvencies of Woolworths and MFI present their newly appointed administrators with some tough tasks.

Dozens of staff from the two insolvency firms concerned are busily putting themselves in the shoes of the former management.

Their task is to try to retrieve something for the creditors - banks, other lenders, suppliers and customers, and possibly the taxman too.

All that means dealing with staff, including making some redundant, running or shutting stores as appropriate, moving stock around, and assessing the levels of debts and the value of assets in the companies.

'On the hoof'

The administrators will be talking to creditors, suppliers, customers and, most importantly, trying to find a buyer for all or parts of the now insolvent businesses.



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The Times says firm could be ‘hours away’ from administration; is MP Peter Mandleson unlikely saviour?
Woolworths is ‘a few desperate hours of negotiation’ away from administration.

That’s according to The Times, which quotes sources saying ‘administration is the most likely option as the retailer scrabbles to find sufficient funds to pay its monthly wage bill’.

However MCV can confirm that the chain’s games buying team is still in place and at work today.

A spokesperson for the firm could not comment when contacted by MCV today.

The Times also reports that Woolworths has now ‘agreed in principal’ to sell 2 entertain to BBC Worldwide, its joint venture partner, for £100 million in a bid to cut its debt.

Elsewhere in the news, Retail Week reports that Business Secretary Lord Mandelson has intervened to attempt to save the chain – and convince its lenders to sell the Woolwroths retail arm to Hilco Ltd.



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The popular Glencarse Hotel, between Dundee and Perth, has gone into liquidation with Ken Pattullo and Scott McGregor, of business rescue, recovery and restructuring specialists Begbies Traynor appointed joint liquidators.

The Hotel, which has five en-suite letting bedrooms and a recently refurbished restaurant which seats 65 people, was bought two years ago by present owners Robb Ltd.

“The fact that the hotel has gone into liquidation is perhaps a sign of the times but the business is carrying on trading and all bookings will be honoured,” said Mr Pattullo. “We are hopeful of a quick sale as it is a popular landmark hotel close to the A90 and we have already had interest expressed in it.”

The Hotel stands in spacious grounds and in addition to the letting bedrooms there is self-contained accommodation for the owners with four bedrooms.

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Shares in troubled retailer Woolworths have been suspended as the firm continues talks to rescue the business.

Woolworths said in a statement that it was in discussions over the potential sale of its 840 stores.

The firm added that it was also in talks to sell its 40% stake in publisher 2 Entertain to BBC Worldwide, which already owns the other 60%.

It warned that both deals needed the backing of its banks, and "there can be no assurance" they would be completed.

BBC Worldwide is the BBC's commercial arm. It confirmed that it was talking to Woolworths over the possible purchase of the retailer's 2 Entertain holding.

Significant debts

Restructuring firm Hilco is said to want to buy the stores, but has so far refused to comment on the speculation.

According to reports, Hilco has offered to buy the shops for £1, but so far cannot reach agreement on how much of Woolworth's £385m debt it will take on.

Without some form of a deal, analysts say Woolworths faces the real risk of going into administration.

However, earlier this week the firm's largest shareholder - property tycoon Ardeshir Naghshineh - called on Woolworths to delay plans to sell the parts of the business.

Instead Mr Naghshineh said the firm should instead look at making money by selling of some of its outlets.

Long history

Shares in Woolworths have fallen by more than 90% over the past year as concerns over its future have risen.

In September, the firm reported a record first-half pre-tax loss of £90.8m and scrapped its dividend to shareholders.

In August, it rejected a takeover bid of £50m for its 815 stores from a group headed by the founder of the Iceland frozen food chain, Malcolm Walker.

BBC business editor Robert Peston warned earlier this week that up to 20,000 of the 30,000 jobs at Woolworths were now at risk whatever the outcome for the firm.

In addition to the Woolworths stores and its 40% stake in 2 Entertain, the company runs distribution business Entertainment UK.


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VAT rise 'dropped just days ago'

The PM and Mr Darling dropped the proposal for an 18.5% VAT rate
A rise in Value Added Tax to 18.5% was in the government's plans until less than a week ago, the BBC understands.

A Treasury document published online by mistake showed it considered bringing in the rise from 2011. The Treasury says the plan was later rejected.

The government is to cut VAT from 17.5% to 15% for 13 months to boost spending.

The Tories say the document shows plans for a "secret tax bombshell". The Lib Dems said ministers might be retaining a rise as a post-election option.

VAT is to be reduced from next Monday and return to its current rate on 31 December 2009, under measures aimed at boosting the economy outlined in Monday's pre-Budget report.

'Fairest options'

But the Treasury note accompanying an order to Parliament, published on a government website, said VAT would "subsequently increase to 18.5% in 2011-12".

BBC political editor Nick Robinson said he had been told the VAT rise was in the government's plans until less than a week ago - when Prime Minister Gordon Brown and Chancellor Alistair Darling met to consider their pre-Budget options

They decided not to go ahead with it but to increase National Insurance and introduce a new 45% top rate on income tax instead.

A Treasury spokesman said the VAT increase was "an option that was considered and rejected".

He said the chancellor had made it clear in his pre-Budget statement to Parliament that "a number of options to raise revenue in future years" had been considered and he had "chosen those which are fairest".

But the Conservatives say there is a "black hole" in the government's plans to repay record borrowing, which would have been filled by a 1% VAT rise.

'Scaremongering'

Party leader David Cameron told the BBC: "That's why the budget doesn't add up, that's why there's such a big black hole, that's why everyone is saying this budget isn't convincing and it isn't.

"There's a secret tax bombshell coming down the road at every family in the country."

Treasury minister Angela Eagle said publication of the document had been "a pure administrative error" adding: "For anyone to think it is anything else is complete scaremongering and opportunism of the worst sort."

MPs will discuss the pre-Budget report for three hours on Wednesday, after shadow chancellor George Osborne secured an emergency Commons debate.

He had said it was a "disgrace" that MPs were not allowed to debate Mr Darling's "reckless gamble".

The chancellor unveiled plans to take borrowing to record levels, cut VAT and cut public spending growth to try to boost the economy and stave off a long recession.

He told the BBC on Tuesday that people earning more than £150,000 would shoulder the "lion's share" of tax increases from 2011 onwards.

Liberal Democrat Treasury spokesman Vince Cable has questioned whether the temporary VAT cut will be sufficient to give the economy a boost and has called for permanent tax cuts for the low paid and those on middle incomes.

'Unpalatable'

He said the draft document which outlined the 18.5% VAT proposal showed that it was being considered "very, very carefully - probably to the last moment" by the government.

He said there were two possibilities about the proposal - one that it was pulled because it was not "politically palatable", which, he said, explained "the very large deficit in their presentation".

The other was "that they still have this on the stocks for after the election", he said.

"It seems fairly clear that not only did they consider it among other options but this was very close to being adopted.

"And I think we can infer from that, if they do need to raise more revenue either before the election or after it - this will almost certainly be the preferred course."



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Holidaymakers will still be able to visit La Manga Club, despite the Spanish resort declaring that it was insolvent last week.

The holiday complex – a popular destination for sporting breaks – and sister company Inmogolf SL, took the decision after it was unable to refinance debts of around £83 million.

However, a spokesperson for La Manga Club said the resort would remain open until the insolvency agreement expires in 2010, after which the owners will again attempt to restructure its debts.

The agreement allows payments to all creditors to be deferred without financial penalty.

La Manga Club, bought for £102 million by Medgroup in 2004, has suffered financial problems in the past, most notably in 1978 when it went bankrupt and was sold to P&O.

A statement from Medgroup blamed the current difficulties on a significant drop in bookings – part of a general crisis being felt by Spain’s high-level tourist sector.

The 1,220-acre Costa Calida resort features three golf courses, 28 tennis courts, eight football pitches and a five-star Hyatt Regency hotel.

La Manga was in the headlines in 2003 after England footballers Rio Ferdinand and John Terry were allegedly involved in a brawl with members of the hotel’s maintenance staff.

The following year three Leicester City players – Paul Dickov, Frank Sinclair and Keith Gillespie – spent a week in jail after being accused of sexual assault while staying at La Manga. Spanish authorities eventually dropped all charges.



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A dodgy satellite TV warranty company from Norwich has been forced into compulsory liquidation after watchdogs launched a probe into their business practices.

Satellite Protection Services Limited, was based in Sackville Place, off Magdalen Street and made unsolicited calls throughout the UK and Channel Islands offering to fix or repair satellite TV equipment in the event of breakdown in return for a renewable ongoing annual subscription of £60.

The company, which traded as Satellite Service, encouraged potential customers to believe that the calls came from Sky or that the company was closely associated with Sky. In fact the company had no connection with Sky.

The directors were 25-year-old Kevin Francis Bowyer, Joe Darren Lloyd, 22, and Daniel Philip Pye, 25, all from Norwich.

A probe by the Companies Investigation Branch (CIB) of the Insolvency Service revealed the company failed to comply with relevant distance selling regulations when it failed to inform customers of their right to cancel their agreements within the statutory cooling off period, and did not provide customers with the registered name of the company or its registered or geographic address.

At the time of the investigation it was telling customers its address was PO Box 749, Bognor Regis, PO21 9BG.

A spokeswoman for the Insolvency Service said: “The company selected telephone numbers for its calls from telephone directories making no attempt to comply with Regulation 21 of The Privacy and Electronic Communications (EC Directive) 2003 which prohibits the making of unsolicited sales telephone calls to persons registered with the Telephone Preference Service.

“Although the company offered to replace irreparable equipment with “new” equipment, in fact replacement equipment was not new but was second-hand or re-conditioned.

“The combination of misleading phone calls, failure to inform customers of their statutory rights to cancel, failure to comply with regulations for the telephone preference service led to CIB (CIB) presenting a petition to wind-up the company in the public interest and in the interim obtained an order appointing the Official Receiver as provisional liquidator of the company.”

Information from the investigation was also referred to the Financial Services Authority (FSA).

The spokeswoman added: “As provisional liquidator the Official Receiver put in place significant changes to the company's sales and administrative systems and this enabled the company's business to be continued under his supervision thereby preserving the assets of the company pending the hearing of the petition.”

The company did not finally contest the making of the winding-up order.

Richard Toone and Kevin Murphy of Chantrey Vellacott DFK have been appointed joint liquidators of the company by the Secretary of State and will be responsible for realising and distributing the assets of the company, which has 8,500 customers.


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Christmas is almost here and you may be worrying about debts in your business. Call us now to put your mind at rest and deal with those debts before they ruin your Christmas.


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BANKERS throughout the UK are frantically manning the panic stations, but it won't be long before the search for a scapegoat to blame for the whole mess begins in earnest.
What is certain is that the banks must accept their part in this financial fiasco. Insolvency practitioners are in a unique position to see how banks lend, how their administration runs and how they receive payments for outstanding debt – and many banks are found wanting in all three departments.

Of course people should act responsibly when seeking debt, but there is a duty on banks also and they are bound by regulations and basic banking principals only to lend to those who can afford to pay them back.

One name seen frequently in insolvency cases in the last few years was that of Northern Rock, typically in relation to the 125 per cent mortgage product it offered. This may have been a viable product in times of burgeoning house prices and when sold to the right person, but too many people had applications accepted who were unable to meet the repayments. Now that house prices are falling they do not even have the luxury of being able to sell up and square off their debts.

Individuals left facing insolvency have a number of options open to them, including a debt management plan or, better, the Debt Arrangement Scheme, which freezes interest and pays the principal off over a period of time depending on what the debtor can afford. For those who cannot repay their debts in full there is the option of a Protected Trust Deed (PTD), where they pay what is affordable over three years and anything unpaid after that is written off.

When a debtor does go into an insolvency arrangement such as a PTD or bankruptcy, there is a statutory requirement for all creditors to back off and they may not pursue their debts further. Unfortunately, this requirement often seems to pass many banks by and they continue to pursue the debtor, often through third-party debt collection companies.

In spite of this over zealous approach, banks have repeatedly shown themselves incapable of administering and receiving the final payment once an insolvency has run its term and the dividend due to creditors has been calculated. If the dividend is not claimed, it is turned over to the Accountant in Bankruptcy and after seven years falls into the hands of the Crown.

With the wheels coming off firms across the financial markets, the first thing banks should do is tighten their practices and procedures.

Lending decisions have not been sufficiently controlled and insolvency proceedings are lost in the automated systems run by the banks. In turn people have taken on debt they cannot afford, the banks are not flexible enough to administer cases that go awry and are not ready to accept payment when it comes. Until these basic inefficiencies are sorted out, the banks cannot point the finger at anybody else for their current woes.

• John Shields is from Independent Insolvency Practitioners, a company operated co-operatively by 25 independent insolvency firms in Scotland.


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CRISIS club Livingston are teetering on the brink of financial meltdown.

Record Sport can reveal the Inland Revenue are threatening the First Division outfit with liquidation after they defaulted on their debt repayment plan.

The taxman has ordered the Italian owners of the Almondvale club to immediately cough up the money they owe, believed to be around £100,000, or a winding up order will be issued.

The Inland Revenue refused to comment, claiming they don't discuss individual cases, but it's believed they held summit talks with the owners - led by lawyer Angelo Massone - last week.

Sources claim Livingston have been given until next week to come up with the sums outstanding or the club could go to the wall.

It's understood Massone is trying to raise fresh finance less than six months after he led a buyout of previous owner Pearse Flynn.

However, co-partner Tomasso Angelini fiercely denied Livingston are in trouble with the Inland Revenue and threatened to sue if we ran with the story.

He said: "There is no such pending order from the Inland Revenue. We have absolutely no problems and make regular payments to them."

Flynn sold out for £1million in June because liabilities, which he insists were fully disclosed, far outstripped assets and disquiet has been growing in recent months about Livi's financial strength.

There are up to 100 creditors, many of them small, local businesses, who have still to be paid by the new owners.

One creditor, former club photographer and website administrator Alex Todd, revealed to Record Sport last month he has even considered freezing Livi's bank accounts.

Massone claimed never to have heard of Todd, who is owed around £1600, even though he sent him a letter three weeks earlier telling him to contact Flynn for his cash.

Massone later promised to look into his claims but last night Todd said: "I've had no contact whatsoever since with Massone or anyone else connected with Livingston."

Already this season there has been a delay in the payment of player bonuses and it is believed the wages of non playing staff were also up to a week late last month.

Angelini added: "We don't discuss internal matters or procedures."

Office and admin staff are holding their breath ahead of next Thursday when monthly salaries are due to be paid.

Our source said: "It's amazing they've kept it quiet for so long. Unless drastic action is taken immediately the club's future is in serious doubt."



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Three months after purchasing apparel chain Steve & Barry's out of bankruptcy, the new owners will liquidate the remaining 173 stores after plans to operate the chain fell victim to slumping retail sales and difficulty in getting financing.
Investment firms Bay Harbour Management and York Capital Management, which had bought the company for $168 million in August, plan to liquidate their holdings by early 2009, according to the company's Chapter 11 bankruptcy filing on Wednesday in Manhattan.
"This is the hardest environment in 30 years for retailers," said Peter Schaeffer, a partner with corporate restructuring and investment adviser Carl Marks. "Chances of companies that have filed for bankruptcy coming out whole is difficult."
BH S&B Holdings, the affiliate of the two investment firms, said in the bankruptcy filing the declining health of the U.S. economy and the slump in the retail market had hurt company revenue.
Sales at all stores have been disappointing, said the filing, citing "the general health of the American economy and the state of the retail market in particular."
Steve & Barry's had violated covenants under their senior secured credit facility and the owners have no prospects to obtain financing to keep operating the stores, according to court documents.
The company had already begun liquidation sales at about 67 stores.
Steve & Barry's, which began in 1985 as a retailer of university-branded clothing, became known for its branded apparel lines from celebrities including actress Sarah Jessica Parker, surfer Laird Hamilton and tennis star Venus Williams.
To differentiate itself, it sold almost everything in its stores for less than $11. At the same time, the chain aggressively negotiated with mall landlords for lower-than-average lease rates and expanded rapidly.
But the economic slump undermined already razor-thin margins, restructuring experts said.
"OBSESSIVELY FOCUSED"
"This business growth was obsessively focused on real estate growth and using recognizable faces to drive brand growth," said Matthew Katz, a managing director at restructuring firm AlixPartners. "In go-go growth years, the business was rewarded. However the underlining business processes and controls were not put in place and as the markets turned, this unraveled quickly."
The company has asked the court for permission to begin store-closing sales immediately because Thanksgiving and the crucial Christmas shopping season are rapidly approaching.
RAS Management Advisors LLC is serving as restructuring adviser, and a joint venture of liquidation firms led by Great American Group LLC and including SB Capital Group, Tiger Capital Group and Hudson Capital Partners will assist in the liquidation, the filing shows.
Separately, former employees of the chain on Nov. 18 sued the owners of Steve & Barry's, saying they were laid off the day before without 60 days advance written notice of their termination, as required by the Worker Adjustment and Retraining Notification Act.
An attorney for the company declined to comment.
The liquidation of Steve & Barry's is another blow for malls that are already losing a slew of tenants to bankruptcy liquidations, including home goods retailer Linens 'n Things and department store Mervyn's.
"In 2009, landlords are going to have to get creative to figure out what to do with the enormous amount of empty stores in their inventory," Schaeffer said.
Some 148,000 retail stores are expected to be shuttered this year, according to the International Council of Shopping Centers. That's the largest number since 2001 and represents at least 625,000 retail jobs. (Additional reporting by Jonathan Stempel; Editing by Lisa Von Ahn and Brian Moss)

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Unemployment will hit three million by 2010, a leading Stoke-on-Trent insolvency specialist has warned.

Bob Young, a corporate recovery expert and partner at Begbies Traynor, says the bottom of the recession is not yet in sight.

According to the firm’s own figures, a staggering 4,566 companies faced “critical” problems – those with county court judgments totalling over £5,000 or winding-up petitions against them – in the third quarter compared with only 791 in the same period last year.

Additionally, the number of companies with ‘significant’ problems – those with a court action and/or average, poor, very poor or insolvent or outdated accounts –nearly doubled to 58,564.

Mr Young, who is also president of North Staffordshire Chamber of Commerce, pointed out that insolvency statistics were a lagging indicator.

“The insolvency figures follow the economy by six to 12 months,” he said.

First come the job losses – in the Midlands the likes of Jaguar Land Rover, JCB and van maker LDV have announced big cuts in recent weeks.

Financial services posts among the major banks are being axed in their thousands across the country.

And the housing market has tumbled with estate agents, builders and the like all decimated.

Mr Young predicted Government insolvency figures – already on the rise – would be up again in the fourth quarter and higher still for the first quarter of next year.

And he cautioned that a recovery was unlikely until homes started moving once more.

“The economy is driven by property,” he said. “That is the sector which has to come back.

“But until the banks and building societies feel they can lend money again then things are not going to improve.”

Purchasers would only return at the point they felt the price fall had reached the bottom.

Many were struggling to get a mortgage or being told they could only have 75 per cent of what they needed. First time buyers could not get on the ladder.

“The market is in a desperate state,” he said.

And it had a spin-off into associated sectors – conveyancers, small builders, white goods, carpet sales and many others.

Mr Young went on: “In previous recessions it hurt and it shook out the weak ones. But the big problem this time is we are seeing a lot of good businesses failing.”

And that was simply down to cash – the lack of overall liquidity.

“People need to realise we are just going into the recession and they need to prepare for a fairly long and hard road.”

Government figures for the third quarter showed there were 4,001 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales on a seasonally adjusted basis. This was an increase of 10.5 per cent on the previous quarter and 26.3 per cent on the same period a year ago.

There were 27,087 individual insolvencies, a jump of 8.8 per cent and an increase of 4.6 per cent on the same period a year ago. This was made up of 17,341 bankruptcies – ahead 12.1 per cent on the previous quarter and 9.5 per cent on the corresponding quarter of the previous year, and 9,746 individual voluntary arrangements, up 3.3 per cent and 3.1 per cent respectively.

The unemployment rate was 5.8 per cent for the three months to September, up 0.4 per cent over the previous quarter and 0.5 per cent over the year. The number of unemployed people increased by 140,000 over the quarter and by 182,000 over the year, to reach 1.82 million.

The claimant count was 980,900 in October, up 36,500 over the previous month and up 154,800 over the year.

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The UK plastics and rubber industry is not faring as badly as other sectors in the economic downturn, latest business insolvency figures have revealed.

Only 28 businesses failed in the third quarter of 2008, compared to 26 during the same period in 2007, according to data by global information services Experian.


Altogether 96 plastics and rubber businesses went under in the first nine months of 2008, nine less than in the same period last year.


Yet, the study of 34 sectors shows there has been a total of 16,591 UK business failures so far this year – a leap of 22% on the same period in 2007.


Key sectors affected include business services with 1,284 insolvencies in quarter three 2008, up by 22.3%, taking the annual total for the sector to more than 3,550 failures. Building and construction saw 537 failures over the quarter, a rise of 22.9% with a year to date total of 1,564 failures.


Tom Pullen, md of Experian’s business information division, said: “Given the difficult trading conditions and rise in insolvencies, it is important that businesses take the right steps to safeguard the supply of their goods and services.


“The best approach is to continually monitor customers’ and suppliers’ commercial integrity against financial performance, credit risk information and payment behaviours. Access to this level of insight provides the intelligence to help businesses manage their exposure to risk.”



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